Besides ongoing costs, what fees can be included in the closure costs for Noodles & Company restaurants?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
two restaurants and a writedown of its lease related assets on four restaurants. In 2022, the Company impaired the fixed assets on four restaurants and the lease related assets on two restaurants. All periods include ongoing equipment costs for restaurants previously impaired.
Restaurant Closures
Closure costs during 2024, 2023 and 2022 pertain to ongoing costs of restaurants that closed in previous years, as well as costs related to the closure of thirteen, six, and five restaurants, respectively. These closure costs were offset by gains of $0.6 million in 20
Source: Item 22 — CONTRACTS (FDD pages 98–99)
What This Means (2025 FDD)
According to the 2025 Noodles & Company Franchise Disclosure Document, closure costs can include fees from real estate advisors and brokers related to lease terminations, as well as charges resulting from final adjustments to liabilities as lease terminations occur. These costs are in addition to the ongoing costs of restaurants that closed in previous years.
In 2024, closure costs were offset by gains of $0.6 million, while in 2023, they were offset by gains of $0.2 million. These gains resulted from adjustments to liabilities as lease terminations occurred. The document also notes that during 2024, 2023 and 2022 closure costs pertained to ongoing costs of restaurants that closed in previous years, as well as costs related to the closure of thirteen, six, and five restaurants, respectively.
This means that if a Noodles & Company franchisee closes a restaurant, they should anticipate potential expenses beyond the typical ongoing operational costs. These additional expenses could involve engaging real estate professionals to handle lease terminations and settling any remaining financial obligations. The franchisee may also experience gains from adjustments to liabilities as leases are terminated, which can offset some of the closure costs. It is important to note that the number of restaurant closures can vary from year to year, impacting the overall closure costs for Noodles & Company.